Part II

Mobile payment in Asia: Insights on Consumer Preferences GMO Research in Asia

About This Paper

There is no doubt that Asia is a hotbed for mobile payment play- ers, and competition is heating up all over the region. So what do the consumers in Asia want out of mobile payment? Here, we will look at user preferences across six key markets in Asia.

This paper examines the market for mobile payment in Asia. Mo- bile payment is the ability to make payments using a portable electronic device such as a mobile phone – a service which is be- coming increasingly in demand in the modern digital world. The findings presented in this paper come from a survey conducted by GMO Research (GMOR) in 2018, and they provide insight into this dynamic and ever-changing market and the challenges and opportunities it will face in the future.

This paper is presented in three parts. In the first part we exam- ined the current state of mobile payment in Asia, drawing com- parisons between Asia and the rest of the world, and between different countries within the region. This section also examined the demographics of Asian mobile users.

In this second part we will look at user preferences, including the most popular uses for mobile payment, the preferred mobile payment apps by country, and the level of competition posed by other forms of payment.

In the third part we will lay out the challenges and opportunities related to mobile payment in Asia. This includes the most signif- icant reasons behind resistance to mobile payment, and the po- tentially enormous market available to companies who are able to overcome consumers’ concerns.

Insights on Consumer Preferences 2 GMO Research Mobile Payment in Asia

Six Prime Asian Markets

The six countries GMO surveyed economy’.9 This is reflected in the – India, China, the Philippines, In- country’s plans for fintech (finan- donesia, Malaysia and Thailand cial technology), which include col- – are each at different stages of laborative cross-border transfers the transition from cash to mobile with neighbouring countries10 and a payment, and while momentum is new QR code payment system for building for mobile payment across 2019.11 the region, cash still dominates in some countries. In Malaysia, mobile payment faces significant competition from the As we have already seen, China existing, well-established infra- and India are blazing a trail, and structure for contactless card pay- have seen some of the fastest ments12 this trend is also seen in growth in mobile payment in the developed Western economies like last few years.7 China in particular, the UK,13 where a population with dominates, with mobile payment a high proportion of ‘banked’ indi- penetrating nearly all segments of viduals (i.e. people with bank ac- the economy and businesses of all counts) prefers the ease of contact- sizes, from large companies to in- less card payments over switching dependent street vendors. These to a new mobile payment service countries demonstrate just how in- or . fluential a force mobile can be. The Asian markets with the most In the Philippines, there is still a potential, therefore, are those with lot of competition for the top spot, high numbers of ‘unbanked’ in- and plenty of contenders are mak- dividuals, as it is more likely that ing their presence felt in the mo- people will transition from cash bile payment market, but there is to mobile than from cards to mo- no clear leader as yet.8 In Thailand, bile. This is why Indonesia – with the government has launched a its strong preference for cash and new economic model, ‘Thailand its increasing adoption of smart- 4.0’, which aims to promote inno- phones – provides such a landmark vation and technology, and move opportunity for mobile payment Thailand away from the ‘middle-in- companies. come trap’ towards a ‘value-based

Insights on Consumer Preferences 3 GMO Research Mobile Payment in Asia

Cash Is Often King

Cash is the biggest competitor to where the number two spot is mobile payment across all the sur- held by credit cards at 25.4%. This veyed Asian countries (Figure 4). supports the notion that payment For almost every country, the re- method preference is a question spondents rated cash as their most of infrastructure and availability: in used payment method, with mobile countries with high usage of cash typically coming in second. Excep- and no dominant digital alterna- tions to this are China – where mo- tives, mobile payment has the po- bile dominates at 45.4%, followed tential to truly make waves. by cash at 24.2% – and Malaysia,

Figure 4: Payment mode preference with cross-country comparison (in %) Please Allocate Your Own Payment Method Usage To The List Below

Cash Mobile Payment Debit Card Debit Card (which is linked to your bank (pre-paid, bank-free) account)

Credit Card Bank Transfer Other

China 24.2 45.4 6.9 3.4 11.4 6.2 2.4 N=998

India 32.9 20.8 16.5 5.2 11.4 10.2 3.0 N=1000

Thailand 49.7 17.4 6.0 3.3 8.5 11.6 3.4 N=1000

Malaysia 38.0 9.5 10.3 2.9 25.4 12.3 1.6 N=1000

The Philippines 56.0 9.8%11.8 9.8 4.9 7.5 5.6 4.5 N=1000

54.3 6.6 8.2 5.5 3.1 12.8 9.4 Indonesia N=995

Source: GMOR survey “Mobile Payment Asia” 2018 Base: All respondents MA Insights on Consumer Preferences 4 GMO Research Mobile Payment in Asia

Bills, Bills, Bills

The most popular use for mobile payment is to pay for phone and internet bills – every surveyed country had this as their top-rated mobile payment activity (Figure 5). Other significant uses are paying utility bills (i.e. electricity, water, gas), and buying food and drinks at restaurants and bars. The countries where mobile payment has a strong influ- ence over the market seem to use this payment method for a wide variety of purchases. For instance, there is little dif- ference between India’s second most popular item, food and drinks (58.4%) and its fifth most popular, groceries (55.8%), while countries with less general uptake of mo- bile payment, such as Indonesia, tend to use it predomi- nantly for just one or two types of transaction (e.g. 51.4% for phone/internet, but only 14.9% for ticketing). This sug- gests that the desire to use mobile payment is there, but the infrastructure does not currently exist in certain indus- tries to support it.

Insights on Consumer Preferences 5 GMO Research Mobile Payment in Asia

Figure 5: Top uses for mobile payment across countries (in%) On Which Payment Occasions Do You Use Mobile Payment?

Phone/ Food & Drinks Electricity/ Clothes/Shoes/ Ticketing Groceries (Restaurant, Bar, Cafe, (Movie, Museum, (Mall, Supermarket, Conve- Internet Fast Food, etc) Water/Gas Accessories Sports, etc) nience store, etc)

7 1.5 72.7 64.2 58.4 China India 60.4 58.0 N=958 N=843 57.5 57.4 56.7 56.3 53.3 55.8

57.4 43.0 38.9 42.1 Thailand Malaysia 38.4 38.0 N=786 N=681 29.8 34.5 26.8 3 1.4 17.9 22.6

7 1.5 5 1.4 39.2 The Indonesia 32.8 37.8 Philippines N=403 24.8 35.2 N=617 23.3 30.1 2 1.8 21.9 14.9

Source: GMOR survey “Mobile Payment Asia” 2018 Base: Mobile payment users only MA Insights on Consumer Preferences 6 GMO Research Mobile Payment in Asia

The Most Dominant Apps

Global giant PayPal takes a signifi- while there are far fewer global cant chunk of the mobile payment brands (e.g. Apple and Samsung) market in several Asian countries in the rankings overall. Perhaps the (Figure 6): it is the most used app biggest opportunities, then, are for in the Philippines (63.7%), Thailand country-specific apps, rather than (58.4%) and Malaysia (56.5%), and global mobile payment brands. the third most used in Indonesia (33.3%). However, each surveyed Although it has been mentioned that country also has popular local apps the various mobile payment markets in their top three, such as PromptPay in Asia differ greatly in terms of ma- in Thailand and Gcash in the Philip- turity and adoption, there remains pines. In India, is the market some similarity in terms of usage leader (84.9%), and in China, patterns and consumer expecta- is by far the biggest player (91.8%). tions. In the last part of this white Apps that have been rolled out paper, we look at challenges faced across ASEAN, such as Pay by the mobile payment industry in and Grab Pay, also appear in the Asia and also opportunities that lie top three apps for these countries, ahead for this booming market.

Figure 6: Top apps for mobile payment with cross-country comparison (in %) Which Mobile Payment App/Service Are You Using Regulary?

Alipay WeChat Pay China Thailand The N=958 N=786 Philippines Paypal Paypal N=617 GCash

Prompt Coins.ph Pay LINE Pay 87.3 91.8 12.1 35.2 58.4 26.8 48.3 63.7 41.0

Paytm

India Malaysia Indonesia N=843 N=681 Paypal N=403

GoPay Google CIMB TCASH Paypal Pay GrabPay Pay

35.9 84.9 18.4 29.8 56.5 29.2 34.2 40.9 33.3

Source: GMOR survey “Mobile Payment Asia” 2018 Base: Mobile payment users only Insights on Consumer Preferences 7 MA GMO Research Mobile Payment in Asia

About GMO Research

GMO Research can offer you an online research solution platform that allows access to our multi-panel, multi-country online panel network – Asia Cloud Panel. Asia Cloud Panel consists of over 22 million online panelists across 13 APAC countries, ranging from consumers to CEOs, and we are constantly expanding our reach both in Asia and globally.

GMO Research is also part of and is backed by GMO Internet Group, one of the largest Internet conglomerates in Japan, specializing in a number of Internet-related technologies, including web infrastructure and e-commerce, Internet media, Internet securities and social media and smartphone platforms. GMO Internet Group has the number one Japanese market share in Internet security, payment processing, e-commerce solutions, web hosting, domain and FX trading.

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References

7 http://www.theasianbanker.com/updates-and- 11 http://fintechnews.sg/25941/mobilepayments/nets- articles/china,-india-and-thailand-lead-asia-pacific-in- itmx-cross-border-qr/ the-growth-of-retail-mobile-payments 12 http://fintechnews.sg/24543/mobilepayments/ 8 http://fintechnews.sg/24543/mobilepayments/ payments-asia/ payments-asia/ 13 https://www.theguardian.com/business/2018/ 9 https://www.thailand-business-news.com/ jun/18/uk-debit-cards-transactions-overtake-cash-for- economics/54286-thailand-4-0-need-know.html the-first-time

10 http://fintechnews.sg/24543/mobilepayments/ payments-asia/

Image Sources Cover 2, Denys Prykhodov, https://www.shutterstock.com/de/image-photo/tach-phone-mobile-wallet-onlain- shopping-157175759?src=aYkNE38i--LKskP_kf5mCA-1-31 Icons, www.freepiks.com Insights on Consumer Preferences 8